$4M Verdict Against A&E Over ‘Flip This House’

Appeals Court Upholds $4M Verdict Against A&E Over ‘Flip This House’

The South Carolina real estate broker who starred on the first season of A&E’s hit reality series was awarded $4 million based on an oral contract to share revenue.

4/11/2011 by Matthew Belloni

Those who think it’s impossible to win a lawsuit against a studio for breach of an oral contract should take note of this new decision:

The Fourth Circuit Court of Appeals has sided with a South Carolina real estate broker who starred on the first season of A&E’s hit reality series Flip This House and sued for half the revenue from the show.

Richard C. Davis and his Trademark Properties, Inc. filed suit against A&E Television Networks in 2006 for breach of contract and fraud, claiming he had agreed orally with the network to share net revenue 50-50 in exchange for developing and appearing on the show. Davis, a real estate broker with a specialty in house-flipping, claimed he brought A&E the idea for the show, which became popular when it premiered in 2006 at the height of the real estate bubble.

In 2008, a federal jury in Charleston, S.C., found that Davis had created an oral contract with A&E executive Charles Nordlander, even though the terms were not formally memorialized in a written deal. The jury awarded Davis $4 million in damages for his share of revenue from the first of the series’ four seasons. (Davis starred on the initial cycle but left amid the dispute over his compensation, eventually producing a similar show, The Real Estate Pros, for A&E rival TLC.)

At the time of the jury decision, A&E said it intended to “follow the appropriate procedures to have the verdict reversed.”

But after appealing the ruling, the Fourth Circuit on Monday upheld the jury verdict enforcing the oral agreement between Davis and A&E. Note to Hollywood: the decision, while unpublished, is an interesting primer on how important it is for studios and networks to commit their deals to writing.

A&E did not respond to a request for comment.

Davis was represented by William Walter Wilkins of South Carolina’s Nexsen Pruet firm, as well as Marty Singer and Brian Wolf of Los Angeles’ Lavely & Singer. A&E was repped by Michael Mukasey and a team from New York’s Debeviose & Plimpton, as well as Robert Jordan of Nelson Mullins Riley & Scarborough in Charleston.